Audiences aren’t always aware of pricing complexities.
Some business decisions that seem purely financial can affect a brand’s reputation.
Drug pricing is a big one for the pharma industry. It has often lived in a world of policy debates governed by technical jargon.
Carreen Winters, partner and president of corporate reputation and advisory at MikeWorldWide, said that shaping this as a finance issue misses an important part of public perception.
“Pricing decisions are increasingly becoming reputation decisions,” she said.
For example, Novo Nordisk last month announced a drastic reduction to the price of its GLP-1 drugs by 50%. The move shows how real patients are viewing access and affordability at a time of economic downturn.
“The public sees this a couple of ways,” Winters said. “It’s seen it as a reflection of values. The drugs are more affordable, but also, what does it say that the company can cut costs that significantly and still be profitable? It’s a bit of a double-edged sword.”
The example shows why comms leaders must consider how perception and reputation fit into broader financial decisions, and why they must be addressed before becoming a reputational crisis.
The problem with pricing
Pharmaceutical pricing has always been complex, Winters said. It involves research costs, insurance negotiations, pharmacy benefit managers and government policies – a lot of behind-the-scenes steps that aren’t seen publicly.
At the same time, drug spending in the U.S. has grown sharply in the past two decades, fueling ongoing public scrutiny over how medicines are priced, she said.
“Stakeholders rarely see the complexity behind the number,” she said.
Patients, lawmakers and media audiences see the simple question of “why does this cost so much?”
“That means the story people tell about pricing can matter as much as the price itself,” Winters said.
If pricing is now a reputation issue, communications leaders can’t treat it as something they simply “explain” after the fact. They need to help shape how pricing decisions are understood before they happen, she said.
To do this, comms leaders should push to be included in discussions when pricing strategy is being debated, she said.
“Their role isn’t to set the price, but to help leaders understand how the decision may land with different audiences,” Winters said.
Ask questions like:
- How will patients interpret this change?
- Does this align with our public positioning?
- What headlines could this generate?
The reputational question every company should ask
Winters suggested a different lens for evaluating pricing decisions.
Instead of asking only whether a price is financially justified, companies should also ask how the decision aligns with the story they want stakeholders to believe about them, she said.
“Is the company positioning itself as patient-first or access-focused? If the price appears to contradict that, reputational risk increases quickly,” she said.
This doesn’t mean companies should avoid hard business decisions. But it does mean they need to understand how those decisions will be interpreted. Patients may be dealing with illness, insurance barriers or financial stress, which can make even technically reasonable prices can feel unfair.
Acknowledge concerns, show empathy and explain how the company is working to improve access, Winters said. “This can help shift the tone of the conversation.”
Stakeholders judge intent
Reputation risk emerges when companies assume stakeholders will evaluate pricing the same way executives do, Winters said.
But they usually don’t.
Instead of looking at supply chains or rebate options, most audiences interpret price through a moral lens of fairness, she said.
“People don’t experience pricing as a spreadsheet,” Winters said. “They experience it as a signal.”
If stakeholders believe a company is prioritizing profits over patients, there’s a problem.
“Even if the economics are defensible, perception can quickly take over,” she said.
Instead of listing every factor that went into a price, explain the principle and intent behind it, Winters said.
“What value does the drug provide? How does the company think about affordability?” she said. “These questions should be considered ahead of time. People may not understand the formula, but they want to understand the intent.”
Reputation forms before the crisis
Pricing debates in any industry are usually filtered through what people already believe about a company, Winters said. In healthcare, people widely already believe many drugs are overpriced.
This means reputation work needs to happen long before a pricing controversy appears, she said.
“When stakeholders already see a company as patient-focused, they’re more likely to give it the benefit of the doubt during tough moments,” she said.
Comms leaders can help build a strong foundation by consistently communicating their brand’s investments and why they’re helpful and explaining support programs or access initiatives, Winters said.
Without that baseline trust, pricing decisions run the risk of being seen as greedy. This doesn’t mean companies won’t have to make tough decisions or stop creating high-priced drugs, they just need to help people better understand their reasons, she said.
If comms teams aren’t involved before the decision is made, they may end up explaining it after the damage is already done.
“The price here isn’t the only story,” Winters said. “What people believe that price says about you is.”
Courtney Blackann is a communications reporter. Connect with her on LinkedIn or email her at courtneyb@ragan.com.
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